Multilateral co-operation agenda continues after RCEP trade deal inked: Chan Chun Sing

SHIFTING supply chains closer to home is not a sustainable strategy, despite calls for more onshore production amid the global disruption of the Covid-19 pandemic, Minister for Trade and Industry Chan Chun Sing said.

He was speaking to the press at the conclusion of the Regional Comprehensive Economic Partnership (RCEP) free trade agreement on Sunday.

The RCEP, a 15-member mega-trade pact, was successfully signed on the sidelines of the 37th Asean Summit, eight years and 46 negotiation meetings after its launch.

"It would be very unwise for us to try to recover from this pandemic in isolation, to overcome the challenges brought about by globalisation (and) digitalisation, in isolation," Mr Chan told a press conference, shortly after he signed the RCEP agreement in the presence of Prime Minister Lee Hsien Loong.

"I think no country would want to see themselves or (be) able to see themselves overcome all these challenges in isolation, so it's very important for us to work together and to continue to press on with the agenda of multilateralism."

Singapore's Ministry of Trade and Industry (MTI) described the RCEP as the base of "a modern, comprehensive, high-quality and mutually beneficial economic partnership" that builds on Asean's earlier deals with free trade agreement (FTA) partners.

The deal covers one-third of the world's economy and population, covering issues such as e-commerce, investment, and intellectual property and competition, and aims to eliminate tariff and non-tariff barriers on substantially all trade in goods within the bloc.

Under the RCEP, tariffs are being dropped for more than 92 per cent of goods traded in the bloc. More than 65 per cent of services industries - such as telecommunications, financial services and logistics - will be open to foreign participation.

"It will further broaden and deepen Singapore's economic linkages and connectivity with the region, open up opportunities and provide businesses with preferential access into growing markets," the MTI added.

The agreement will take effect once it has been ratified by six of the 10 Asean countries, as well as three of their five non-Asean trade partners.

"No, we don't have a firm timeline now, but we expect this to be done soonest, because I think all the countries involved have given the commitment to expedite their domestic processes," Mr Chan said. Singapore plans to ratify the RCEP in "the next few months".

The Republic's RCEP partners comprise its fellow Asean member states, as well as Australia, China, Japan, South Korea and New Zealand.

India pulled out of talks last year on disagreements over areas such as the movement of services professionals under the agreement, although the remaining participants stressed in a joint statement in June that "the RCEP remains open for India".

"We remain open to India's participation at a time when India is ready to rejoin the grouping," Mr Chan has now reiterated.

He added that, even without India, the RCEP is "still a very significant agreement" and "the largest FTA across the world".

"While India may not be in the RCEP at this point in time, it doesn't mean that the economic linkages between India and the RCEP countries are not in existence…

"Many of the firms that invest in this part of the world do not just serve the Chinese or the Asean market, but they serve the regional markets," Mr Chan told reporters.

Meanwhile, the Republic had earlier presented the RCEP and Trans-Pacific Partnership (TPP) as "mutually reinforcing pathways" to a free trade area in the Asia-Pacific.

The TPP would have brought members of the Asia-Pacific Economic Cooperation (Apec) bloc, including Singapore, into closer economic integration.

To a question on whether President-elect Joe Biden might return the US to the group's fold, Mr Chan said: "First, I think we'll need to let the US administration settle down. We'll be in close consultation with the US after they settle down."

The TPP had become the 11-country Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) after outgoing US President Donald Trump withdrew the United States from the deal shortly after taking office in 2017.

Mr Chan said in prepared remarks on Sunday: "At a time where support for multilateralism is fraying, the RCEP will send a clear statement of the region's unwavering support and commitment to the multilateral trading system.

"It will place the region as (sic) the forefront of the regional economic recovery and remain as an attractive and integrated investment destination during Covid and post-Covid."

Lauding "its leadership as a trusted and neutral group", Mr Chan also said that "Asean has played a critical role in this journey".

"Without the RCEP, it would have been much harder for some of us to do bilateral or trilateral trade deals," he added.

Earlier at the RCEP Summit meeting, PM Lee said that now begins the hard work of implementing the agreement and encouraging businesses to take full advantage of it.

"We have all made difficult trade-offs to advance the negotiations. And we will have to work hard to persuade our citizens that the RCEP will benefit them," said Mr Lee. "But I have no doubt that the RCEP is a plus for all of us, and will help stem the tide against globalisation and economic integration."